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Despite Sanctions, North Korea Runs More Than 50 Restaurants in China

FILE - The symbol of the United Nations is displayed outside the Secretariat Building at U.N. headquarters in New York, Feb. 28, 2022.
FILE - The symbol of the United Nations is displayed outside the Secretariat Building at U.N. headquarters in New York, Feb. 28, 2022.

North Korea is operating more than 50 restaurants staffed by its citizens in more than 10 Chinese cities in violation of U.N. sanctions, according to a diplomatic source.

The North Korean regime takes most of the wages its workers earn abroad to fund its nuclear and missile programs.

The source, who asked not to be named because the person was not authorized to speak to the press, provided the names of the restaurants in Korean and Chinese and their addresses in China to VOA's Korean Service.

The U.N. Panel of Experts that monitors enforcement of sanctions against North Korea is expected to include the list in a report scheduled for publication in the coming weeks, the source said.

The U.S. called for all U.N. member states to enforce sanctions on North Korea when asked about VOA Korean's findings.

"Under Security Council Resolution 2397, all U.N. member states are obligated to repatriate DPRK nationals earning income in their jurisdiction, subject to certain exceptions," a U.S. State Department spokesperson said. DPRK stands for the Democratic People's Republic of Korea, the country's official name.

"Revenue generated by overseas DPRK laborers is used to fund the DPRK's WMD [weapons of mass destruction] and ballistic missile programs," continued the spokesperson on Tuesday via email to VOA's Korean Service.

The U.N. Security Council passed Resolution 2397 in 2017 requiring all member states to send North Korean workers back to their countries by December 2019. It was adopted in response to North Korea's launch of a Hwasong-15 intercontinental ballistic missile in November 2017.

It will be the first time that a list of North Korean restaurants in China will be included in a U.N. expert panel report since the December 2019 deadline, although the panel published a report listing North Korean restaurants nine months prior to that.

Liu Pengyu, a spokesperson for the Chinese Embassy in Washington, told VOA's Korean Service on Monday that he was "unaware of the specific situation."

He continued, via email, "China has been earnestly implementing the relevant Security Council resolutions. The resolutions are not just about sanctions, but also stress the importance of dialogue."

He added, "We oppose taking a selective, sanctions-only approach without due emphasis on promoting dialogues."

Joshua Stanton, an attorney based in Washington who helped draft the U.S. Sanctions and Policy Enforcement Act in 2016, said, "The fact that China allows them to work inside its territory five years after a U.N. deadline to repatriate them is further proof, which can be added to an already extensive file of evidence, that it is a flagrant violator of the sanctions it voted for in the Security Council."

Stanton said via email to VOA on Wednesday that North Korea uses restaurants it sets up overseas as "fronts for laundering cash from forced labor, cybercrimes and other illicit activities."

The regime also sends young women from North Korea to work long hours at its restaurants abroad and then confiscates most or all of their wages, he said.

The list includes seven North Korean restaurants in Beijing and seven in Shanghai.

Shenyang, a city in Liaoning province that borders North Korea, has 17.

Dandong, a city about 12 kilometers (7.45 miles) from the North Korean city of Shinuiju, has the second-largest concentration of North Korean restaurants on the list. Shinuiju is near the Sino-Korean Friendship Bridge that connects the two countries.

Aaron Arnold, a former member of the U.N. Panel of Experts for North Korea's sanctions and currently a senior associate fellow at the Royal United Service Institute, a London-based security think tank, told VOA Korean that China and North Korea could be violating other U.N. sanctions. He spoke with VOA Korean on Wednesday via email.

If the restaurants are considered a joint venture, they are in violation of Resolution 2270, which bans establishing new entities with North Korea, according to Arnold. If the restaurants have bank accounts in China, they also violate Resolution 1874, he continued.

UNSC Resolution 2375, passed in 2017, bans all joint ventures including existing ones formed with North Korea.

"Our own government is also to blame if Chinese banks are either willfully or negligently laundering that money and not facing subpoenas, investigations, special measures and secondary sanctions for doing so," said Stanton.

Secondary sanctions refer to sanctions targeting foreign entities and individuals such as Chinese banks that conduct businesses with already sanctioned entities, individuals and countries such as North Korea.

Arnold said the presence of North Korean restaurants in China represents "another example of China failing to implement its sanctions obligations."

North Korea has also operated restaurants in Vietnam, Laos, Cambodia and Thailand in the past. Some have closed since the sanctions and the COVID-19 pandemic, while others remain open.